ESG Performance and Corporate Financial Resilience: The Mediating Roles of Risk Mitigation and Financing Constraints

Main Article Content

Yuqi Deng
Dalian Jiaotong University, Dalian 116000, China

DOI: https://doi.org/10.70267/icbms.2601.169191

Keywords

ESG performance, corporate financial resilience, risk mitigation, financing constraints, heterogeneity analysis

Abstract

This study examines the impact of ESG performance on corporate financial resilience and the underlying mechanisms. Using a sample of Chinese A-share listed manufacturing firms from 2015 to 2022, we construct a multidimensional financial resilience index based on the “resist-recover-reorganize” paradigm and employ fixed-effects models and mediation analysis. The results show that ESG performance significantly enhances corporate financial resilience, with this effect operating through two parallel mediating channels: risk mitigation and financing constraints alleviation. Heterogeneity analyses reveal that the positive effect is more pronounced for firms with better financial health, firms in non-high-tech industries, heavily polluting firms, firms in the Eastern region, and larger firms. These findings provide theoretical contributions to the ESG and resilience literature and offer practical implications for managers, investors, and policymakers seeking to build more resilient organizations in an uncertain environment.

Abstract 46 | PDF Downloads 12

References

  • [1] Conz, E., & Magnani, G. (2020). A dynamic perspective on the resilience of firms: A systematic literature review and a framework for future research. European Management Journal, 38(3). https://doi.org/10.1016/j.emj.2019.12.004
  • [2] Vy, N. N. T., Giang, D. T., & Thu, L. N. A. (2025). How Does Financial Resilience Enable Firms To Survive Periods Of Hardship? Advances in Economics, Business and Management Research, 513–530. https://doi.org/10.2991/978-94-6463-694-9_34
  • [3] Stulz, R. M., & Stulz, R. M. (2024, September 24). Risk, the Limits of Financial Risk Management, and Corporate Resilience. The Harvard Law School Forum on Corporate Governance. https://corpgov.law.harvard.edu/2024/09/24/risk-the-limits-of-financial-risk-management-and-corporate-resilience/https://corpgov.law.harvard.edu/2024/09/24/risk-the-limits-of-financial-risk-management-and-corporate-resilience/
  • [4] Wang, X. V. (2026). ESG performance and stock price crash risk: The dual perspectives of corporate intelligent transformation and green innovation efficiency. Finance Research Letters, 109742. https://doi.org/10.1016/j.frl.2026.109742
  • [5] Kwong, R., Wong, H. S. M., & Kwok, M. L. J. (2026). ESG as a turnaround strategy: Evidence from global firms facing performance shortfalls. Research in International Business and Finance, 83, 103308. https://doi.org/10.1016/j.ribaf.2026.103308
  • [6] Dauerer, A. (2025). A Systematic Literature Review of Performance Measurement Systems and the integration of ESG factors. Environmental and Sustainability Indicators, 27, 100746. https://doi.org/10.1016/j.indic.2025.100746
  • [7] Xie, L., Peng, Z., Tong, X., & Zhou, W. (2026). ESG disclosure and financing constraints: Evidence from Chinese listed firms. Economic Analysis and Policy, 89, 742–756. https://doi.org/10.1016/j.eap.2025.12.040
  • [8] Li, W., Zhu, J., & Liu, C. (2024). Environmental, social, and governance performance, financing constraints, and corporate investment efficiency: Empirical evidence from China. Heliyon, 10(22), e40401–e40401. https://doi.org/10.1016/j.heliyon.2024.e40401
  • [9] Lyu, S., & Xue, J. (2024). A Path Study of ESG Standards for SME Financing Constraint Mitigation. Accounting and Corporate Management, 6(4). https://doi.org/10.23977/acccm.2024.060414
  • [10] Khalid, F., Razzaq, A., Ming, J., & Razi, U. (2022). Firm characteristics, governance mechanisms, and ESG disclosure: how caring about sustainable concerns? Environmental Science and Pollution Research, 29. https://doi.org/10.1007/s11356-022-21489-z
  • [11] Liu, X. (2023). Performance of Corporate Sustainability Based on ESG Perspective. Advances in Economics Management and Political Sciences, 13(1), 82–91. https://doi.org/10.54254/2754-1169/13/20230675
  • [12] Ni, Z. (2023). Corporate ESG Investment: Factors Affecting the Economic Sustainability. Advances in Economics Management and Political Sciences, 39(1), 210–214. https://doi.org/10.54254/2754-1169/39/20231971
  • [13] Shiu, Y.-M., & Yang, S.-L. (2016). Does engagement in corporate social responsibility provide strategic insurance-like effects? Strategic Management Journal, 38(2), 455–470. https://doi.org/10.1002/smj.2494
  • [14] Massey, M. (2024). How to manage ESG risk. Cambridge Advance Online. https://advanceonline.cam.ac.uk/blog/how-to-manage-esg-risk
  • [15] Dhaliwal, D., Li, O. Z., Tsang, A., & Yang, Y. G. (2014). Corporate social responsibility disclosure and the cost of equity capital: The roles of stakeholder orientation and financial transparency. Journal of Accounting and Public Policy, 33(4), 328–355. https://doi.org/10.1016/j.jaccpubpol.2014.04.006
  • [16] Plumlee, M., Brown, D., Hayes, R. M., & Marshall, R. S. (2015). Voluntary environmental disclosure quality and firm value: Further evidence. Journal of Accounting and Public Policy, 34(4), 336–361.
  • [17] Flammer, C. (2021). Corporate Green Bonds. Journal of Financial Economics, 142(2), 499–516. https://doi.org/10.1016/j.jfineco.2021.01.010
  • [18] Su, W., & Junge, S. (2023). Unlocking the recipe for organizational resilience: European Management Journal, 41(6). https://doi.org/10.1016/j.emj.2023.03.002
  • [19] Gasbarro, D., Miao, H., Schwebach, R. G., & Zumwalt, J. K. (2025). Cash holdings and risk-adjusted returns: The role of business strategy, life cycle, and managerial ability. International Review of Financial Analysis, 105, 104376. https://doi.org/10.1016/j.irfa.2025.104376
  • [20] Li, X., Fung, A., Fung, H.-G., & Jin, H. (2025). Enhancing firm resilience: A dual focus on value creation and risk mitigation. International Review of Financial Analysis, 106, 104562. https://doi.org/10.1016/j.irfa.2025.104562
  • [21] Ghosh, S., Bandyopadhyay, D., Bhowmik, C., Sinha, S., & Ray, A. (2026). Reinforcing Small- and Medium-Sized Enterprises’ Resilience to Future Disruptions: A Novel Decision-Making Framework for Supply Chain Risk Quantification. Risk Sciences, 100052. https://doi.org/10.1016/j.risk.2026.100052
  • [22] Tong, C., Huang, Z., Wang, T., & Zhang, C. (2023). The effects of economic uncertainty on financial volatility: A comprehensive investigation. Journal of Empirical Finance, 73, 369–389. https://doi.org/10.1016/j.jempfin.2023.08.004
  • [23] Wang Haijun, Jiao Shuaipeng, & Chao, M. (2024). The Impact of ESG Responsibility Performance on Corporate Resilience. International Review of Economics & Finance, 93. https://doi.org/10.1016/j.iref.2024.05.033
  • [24] Yang, X., Fahmi, A., & Yusuf Karbhari. (2024). Can good ESG performance help companies resist external shocks? Investment Analysts Journal, 54(4), 1–25. https://doi.org/10.1080/10293523.2024.2430831
  • [25] Gao, M., & Geng, X. (2024). The role of ESG performance during times of COVID-19 pandemic. Scientific Reports, 14(1). https://doi.org/10.1038/s41598-024-52245-7
  • [26] Yang, Y., & Wang, L. (2026). ESG performance, investment efficiency and supply chain resilience. International Review of Financial Analysis, 109, 104823. https://doi.org/10.1016/j.irfa.2025.104823
  • [27] Mian, H. R., Hewage, K., & Sadiq, R. (2024). Responsible Financing and Investment: Identification, Development, and Assessment of Environmental, Social, and Governance (ESG) metrics. Sustainable Futures, 8, 100246. https://doi.org/10.1016/j.sftr.2024.100246
  • [28] Lin, Y., & Li, S. (2024). Supply Chain Resilience, ESG Performance, and Corporate Growth. International Review of Economics & Finance, 97, 103763. https://doi.org/10.1016/j.iref.2024.103763
  • [29] Chen, X., Liu, W., Chen, G., Wang, X., & Zhang, Y. (2026). Can artificial intelligence enhance corporate resilience? Empirical evidence from China’s A-share listed firms. Pacific-Basin Finance Journal, 97, 103112. https://doi.org/10.1016/j.pacfin.2026.103112
  • [30] Hasan Tutar, Štreimikienė, D., & Mutlu, H. T. (2025). The Relationship Between ESG and Financial Performance in Global Firms: A Multidimensional Study Across Sectors and Regions for the Period 2015–2025. Corporate Social Responsibility and Environmental Management, 32(6). https://doi.org/10.1002/csr.70136
  • [31] Wang, X., & Yao, L. (2024). Can enterprise ESG practices ease their financing constraints? Evidence from Chinese listed companies. Heliyon, 10(20), e38923. https://doi.org/10.1016/j.heliyon.2024.e38923
  • [32] Eskantar, M., Constantin Zopounidis, Michalis Doumpos, Emilios Galariotis, & Khaled Guesmi. (2024). Navigating ESG complexity: An in-depth analysis of sustainability criteria, frameworks, and impact assessment. International Review of Financial Analysis (Online)/International Review of Financial Analysis, 95, 103380–103380. https://doi.org/10.1016/j.irfa.2024.103380
  • [33] Wang, C. (2024). The Relationship between ESG Performance and Corporate Performance - Based on Stakeholder Theory. SHS Web of Conferences, 190(10), 03022–03022. https://doi.org/10.1051/shsconf/202419003022
  • [34] Xu, Y., Wang, S., Wang, T., Fan, Q., & Chak, M. (2025). ESG Ratings, Agency Cost and Corporate Performance: The Case of Chinese Firms in 2009-2023. Sustainable Futures, 10, 101148–101148. https://doi.org/10.1016/j.sftr.2025.101148
  • [35] Hou, S., Zhang, Y., & Song, L. (2023). Digital finance and regional economic resilience: Evidence from 283 cities in China. Heliyon, 9(10), e21086. https://doi.org/10.1016/j.heliyon.2023.e21086
  • [36] Yu, H., Wang, Y., & Li, D. (2023). Using the AHPEntropy Weight Method to Study Regional Marine Economy Resilience in China. Journal of Coastal Research, 39(5), 960–969. JSTOR. https://doi.org/10.2307/48743652
  • [37] Wu, D., Song, Z., & Jin, S. (2025). ESG performance and financial Stability: The moderating effect of CEO characteristics. Journal of Environmental Management, 393, 127049–127049. https://doi.org/10.1016/j.jenvman.2025.127049
  • [38] Martin, B., Brindisi, C., & Kay, I. (2020, September 14). The Stakeholder Model and ESG. The Harvard Law School Forum on Corporate Governance. https://corpgov.law.harvard.edu/2020/09/14/the-stakeholder-model-and-esg/
  • [39] Walker, T., Fernandes, A., & Karami, M. (2024). Corporate resilience during crises and the role of ESG factors: Evidence from the COVID-19 pandemic. Finance Research Letters, 69, 106168. https://doi.org/10.1016/j.frl.2024.106168
  • [40] Chau, L., Anh, L., & Duc, V. (2025). Valuing ESG: How financial markets respond to corporate sustainability. International Business Review, 34(3), 102418. https://doi.org/10.1016/j.ibusrev.2025.102418
  • [41] Khurshid, A., Xu, S., Khan, K., & Cifuentes‐Faura, J. (2026). Resilience, Dynamic Capabilities, and ESG: the Strategic Connection. Business Strategy and the Environment. https://doi.org/10.1002/bse.70627
  • [42] Xu, X., Li, Z., & Liu, F. (2025). Greenwashing in ESG information disclosure: An intertemporal signaling game approach. International Journal of Production Economics, 287, 109674. https://doi.org/10.1016/j.ijpe.2025.109674
  • [43] Pinto, I., & Gaio, C. (2025). ESG Performance and Information Asymmetry: The Moderating Role of Ownership Concentration. Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.3260
  • [44] Iazzolino, G., Bruni, M. E., Veltri, S., Morea, D., & Baldissarro, G. (2023). The Impact of ESG Factors on Financial Efficiency: An Empirical Analysis for the Selection of Sustainable Firm Portfolios. Corporate Social Responsibility and Environmental Management, 30(4). https://doi.org/10.1002/csr.2463
  • [45] Fu, M., Meles, A., Salerno, D., & Yan, A. (2026). ESG activities and stock liquidity. Journal of Financial Stability, 101528. https://doi.org/10.1016/j.jfs.2026.101528
  • [46] Wu, Y., & Tham, J. (2023). The Impact of Environmental regulation, Environment, Social and Government Performance, and Technological Innovation on Enterprise Resilience under a Green Recovery. Heliyon, 9(10), e20278–e20278. https://doi.org/10.1016/j.heliyon.2023.e20278
  • [47] Nirosha Hewa Wellalage, Reddy, K., & Wallace, D. (2023). Environmental Performance and the Role of government support: Evidence from the Recent COVID-19 Pandemic. Finance Research Letters, 58, 104318–104318. https://doi.org/10.1016/j.frl.2023.104318
  • [48] Jia, X., Chowdhury, M., Prayag, G., & Hossan Chowdhury, M. M. (2020). The role of social capital on proactive and reactive resilience of organizations post-disaster. International Journal of Disaster Risk Reduction, 48, 101614.
  • [49] Rolf, S. (2023). Responding to a societal crisis: How does corporate social responsibility engagement influence corporate reputation? Journal of General Management, 030630702311700. https://doi.org/10.1177/03063070231170051
  • [50] Huang, D., Hu, S., & Wang, H. (2025). Corporate Social Responsibility as a Buffer in Times of Crisis: Evidence from China’s Stock Market During COVID-19. Sustainability, 17(14), 6636–6636. https://doi.org/10.3390/su17146636
  • [51] Smilowitz, A., DeNicola, P., Garcia, R., Smilowitz, A., DeNicola, P., & Garcia, R. (2025, October 8). Effective Board Leadership: The Art of Doing It Well and the Risks of Getting It Wrong. The Harvard Law School Forum on Corporate Governance. https://corpgov.law.harvard.edu/2025/10/08/effective-board-leadership-the-art-of-doing-it-well-and-the-risks-of-getting-it-wrong/
  • [52] Lu, H., Mirza, S. S., & Huang, C. (2025). The Dynamics of ESG Peer Pressure and Corporate Resilience: Examining Through Firm‐Perceived EPU and Governance Efficiency Perspectives. Corporate Social Responsibility and Environmental Management, 32(5). https://doi.org/10.1002/csr.70001
  • [53] Thanh, B. A., Sang, N. M., & Khuong, N. V. (2024). Corporate governance mechanism and firm value: evidence from an emerging economy. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2024.2364844
  • [54] Muhammad Azhar Khalil, Khalil, S., & Pathathai Sinliamthong. (2024). From Ratings to Resilience: The Role and Implications of Environmental, Social, and Governance (ESG) Performance in Corporate Solvency. Sustainable Futures, 8, 100304–100304. https://doi.org/10.1016/j.sftr.2024.100304
  • [55] Ioannis Chasiotis, Dimitrios Gounopoulos, Dimitrios Konstantios, Naoum, V., & Patsika, V. (2023). Does ESG reputational risk affect the efficiency and speed of adjustment of corporate investment? European Financial Management, 30(2), 839–878. https://doi.org/10.1111/eufm.12470
  • [56] Cardillo, M. A. dos R., & Basso, L. F. C. (2024). Revisiting Knowledge on ESG/CSR and Financial performance: a Bibliometric and Systematic Review of Moderating Variables. Journal of Innovation & Knowledge, 10(1), 100648. https://doi.org/10.1016/j.jik.2024.100648
  • [57] Merladet, J., Lumbreras, S., & Ramos, A. (2025). The resilient power of CSR: Sustained risk reduction despite widespread ESG adoption. Finance Research Letters, 79, 107240. https://doi.org/10.1016/j.frl.2025.107240
  • [58] Du, Q., Sun, Z., Goodell, J. W., Du, A. M., & Yang, T. (2024). Ecological risk and corporate sustainability: Examining ESG performance, risk management, and productivity. International Review of Financial Analysis, 96, 103551. https://doi.org/10.1016/j.irfa.2024.103551
  • [59] Asmi, F., Neher, A., & Wong, A. (2026). The Evolution of Environmental, Social, and Governance ( ESG ) and Risk and Its Implications for Sustainable Finance: A Systematic Literature Review. Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.70402
  • [60] Muhammad Sani Khamisu, Ratna Achuta Paluri, & Vandana Sonwaney. (2024). Stakeholders’ perspectives on critical success factors for environmental social and governance (ESG) implementation. Journal of Environmental Management, 365, 121583–121583. https://doi.org/10.1016/j.jenvman.2024.121583
  • [61] Citterio, A., & King, T. (2022). The role of Environmental, Social, and Governance (ESG) in predicting bank financial distress. Finance Research Letters, 51, 103411. https://doi.org/10.1016/j.frl.2022.103411
  • [62] Li, N., Li, G., & Xue, J. (2025). Does ESG protect firms equally during crises? The role of supply chain concentration. Omega, 130, 103171. https://doi.org/10.1016/j.omega.2024.103171
  • [63] Agapova, A., King, T., & Ranta, M. (2025). Navigating transparency: The interplay of ESG disclosure and voluntary earnings guidance. International Review of Financial Analysis, 97, 103813. https://doi.org/10.1016/j.irfa.2024.103813
  • [64] Lou, Z., Li, S., Tong, J., & Zhao, J. (2025). ESG rating disagreement and the cost of equity capital. Global Finance Journal, 66, 101123. https://doi.org/10.1016/j.gfj.2025.101123
  • [65] Liu, Z. (2025). The Strategic Case for ESG: Risk Management and Long-Term Sustainability. Advances in Economics Management and Political Sciences, 197(1), 53–56. https://doi.org/10.54254/2754-1169/2025.25678
  • [66] Kim, S., Kumar, N., Lee, J., & Oh, J. (2025). ESG lending. Journal of Financial Economics, 173, 104150–104150. https://doi.org/10.1016/j.jfineco.2025.104150
  • [67] Bilyay-Erdogan, S., Danisman, G. O., & Demir, E. (2024). ESG performance and investment efficiency: The impact of information asymmetry. Journal of International Financial Markets, Institutions and Money, 91, 101919. https://doi.org/10.1016/j.intfin.2023.101919
  • [68] Loiola, R. R., Kimura, H., & de, L. (2025). Sustainable Finance, Green Bonds and Financial Performance—A Literature Review. International Journal of Financial Studies, 13(4), 233–233. https://doi.org/10.3390/ijfs13040233
  • [69] Li, Y., Zhang, Y., & Geng, L. (2024). Digital Finance, Financing Constraints and Supply Chain Resilience. International Review of Economics & Finance, 96, 103545–103545. https://doi.org/10.1016/j.iref.2024.103545
  • [70] Wang, B. (2025). Influencing Factors and Comparative Study of Firms’ Financing Channels. Advances in Economics, Management and Political Sciences, 160(1), 144–151. https://doi.org/10.54254/2754-1169/2025.19797

Article Sidebar

PDF
Published
Apr 14, 2026
Conference Proceedings Volume
Vol. 13 (2026): Proceedings of the 3rd International Conference on Business, Management and Sustainability (ICBMS 2026)
Section
Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Yuqi Deng. “ESG Performance and Corporate Financial Resilience: The Mediating Roles of Risk Mitigation and Financing Constraints”. Exploring Science Academic Conference Series, vol. 13, Apr. 2026, pp. 169-91, https://doi.org/10.70267/icbms.2601.169191.